New York, NY – Traders in the U.S. equity options market are eagerly anticipating Nvidia’s upcoming earnings report, as they anticipate a potentially significant impact on the shares of the leading artificial intelligence chipmaker. Options data suggests that the company’s stock could experience an 11% swing in either direction following its quarterly results on Feb. 21, a much larger move than its average earnings move of 6.7% over the last three years. This forecasted move has generated considerable interest among investors, given Nvidia’s current market capitalization of $1.8 trillion, which could result in a potential swing in market value of about $200 billion. This would surpass the market capitalization of chipmaker Intel Corp and be larger than about 90% of S&P 500 constituents.
On Feb. 18, more than 750,000 Nvidia options had been traded by 1 p.m., making it the second most actively traded single stock name in the options market. Despite the stock’s significant year-to-date increase, demand for upside options bets on Nvidia remains strong, as indicated by the stock’s 90-day 25 delta call skew, which is near a five-year high. According to analysts, this elevated call skew reflects investor confidence in the potential for significant upside, despite the stock’s recent performance, and a strong demand for upside exposure as some investors turn to upside calls for lower-risk exposure.
Recent developments have further fueled the anticipation surrounding Nvidia, as the company surpassed Google-parent Alphabet as the third most valuable U.S. company on Feb. 17. Market analysts expect Nvidia to post earnings of $4.56 a share, and a significant rise in quarterly revenue to $20.378 billion from $6.05 billion a year ago.
The options market’s heightened anticipation for Nvidia’s upcoming earnings report reflects a growing focus on the potential impact of this leading chipmaker’s performance on the wider stock market. As investors prepare for the highly anticipated earnings release, all eyes are on how Nvidia’s quarterly results will shape the trajectory of the company’s stock and potentially influence the broader market.